The benchmark Sensex turned volatile after opening on a positive note in early trade on Thursday amid weakness in banking, pharma, metals, realty and IT stocks.
The 30-share index was trading flat at 36,373.23 after beginning the session 142.14 points higher. The index had lost 146.52 points in the previous session.
All sectoral indices were trading in the red.
Midcap stocks bled with MindTree, UBL, PC Jeweller falling up to 7 per cent.
The NSE Nifty dropped below the 11,000 mark, falling 24.75 points, or 0.23 per cent, to 10,955.70.
HDFC, Kotak Bank, ITC, TCS, IndusInd Bank, L&T and SBI were among the top losers, shedding up to 1 per cent.
Meanwhile, ONGC was the biggest gainer after the Cabinet on Wednesday tweaked pre-1999 oil and gas contracts to provide for proportionate sharing of statutory levies like royalty and cess between the operators of an area, and not put the entire burden on state-owned ONGC.
Shares of the company surged 2.03 per cent to Rs 163.55, followed by M&M 1.44 per cent to Rs 915.20. Oil India also gained 0.29 per cent to Rs 209.70.
Domestic institutional investors (DIIs) bought shares worth a net of Rs 111.01 crore, while foreign portfolio investors (FPIs) bought shares worth a net of Rs 95.68 crore on Wednesday, provisional data released by stock exchanges showed.
On the other hand, Asian stocks notched moderate gains, tracking increases seen on Wall Street overnight as the US Federal Reserve chief offered an upbeat assessment of the economy, also influenced the sentiments.
Hong Kong's Hang Seng was up 0.49 per cent and Shanghai Composite Index 0.13 per cent in early trade. Japan's Nikkei too gained 0.23 per cent.
The US Dow Jones Industrial Average ended 0.32 per cent higher on Wednesday.